Case Study
Assess & Advise: Pre-Acquisition Cryptocurrency Assessment
FTI Technology’s Cryptocurrency Experts Provide In-Depth Audit of Digital Assets, Business Model and Infrastructure in Support of Due Diligence Activities
Situation
A diversified financial services and investment management innovator was looking to acquire an institutional digital asset custody, trading and finance provider.
In addition to the more traditional due diligence exercises in M&A transactions, fully understanding potential problems in a target company’s cryptocurrency assets, framework and business model is imperative to the success of verifying assets under custody (AUC) is particularly challenging.
Our Role
FTI Technology’s Cryptocurrency experts provided our client with a detailed and verified technical audit of the target company’s cryptocurrency AUC, technology roadmap, infrastructure, business models and privacy and security practices.
Through a unique understanding and approach to acquisition due diligence, our experts were able to quickly deliver technical, data security and operational assessments while developing an expedited path to financial due diligence based on our deep understanding of how cryptocurrency businesses monetize.
With in-depth knowledge of wallets, behavior of cryptocurrency exchanges and the operational hurdles unique to the world of blockchain, our experts were able to design and execute a unique strategy to confirm ownership and prove validity of AUC.
In addition to supporting the client with verifying cryptocurrency assets and infrastructure, FTI Technology’s technical assessment included a close look at data privacy and security including risk areas that could implicate the transaction. Through a detailed risk evaluation, the team helped the client identify and mitigate all potential risks in the acquisition and provided guidance for remedial actions throughout the due diligence process.
Our Impact
Uncovered potential risks to privacy and data security which were quickly remediated prior to closing the transaction. And based on findings, additional legal language was added to the agreement to protect the acquirer.
Successfully assessed strength of digital asset technology, supporting infrastructure and future plans for growth. ensuring that the R&D team is focused on the most impactful product development roadmap - ensure the company is not obsolete shortly after acquisition.
Designed and executed a unique strategy to confirm ownership of controlled assets and AUC.
Uncovered potential risks to privacy and data security which were quickly remediated prior to closing the transaction. And based on findings, additional legal language was added to the agreement to protect the acquirer.
Successfully assessed strength of digital asset technology, supporting infrastructure and future plans for growth. ensuring that the R&D team is focused on the most impactful product development roadmap - ensure the company is not obsolete shortly after acquisition.
Designed and executed a unique strategy to confirm ownership of controlled assets and AUC.